Monday, December 5, 2016

Q&A: Can Your Responsible Choices Can End Up Hurting Your Credit Score?

Q: I've had some trouble with credit in the past, but I'm trying to turn over a new leaf. I think I'm doing everything right, but my credit score still isn't rising! What gives?

A: Credit scores can affect you more than you know. Employers look at credit scores. Landlords look at credit scores. Bill providers look at credit scores, and they might decide to charge you if yours gets too low. With all this pressure, you've no doubt started working on some good habits for improving your credit score. You pay your bills on time, are sure to not max out your credit line and work hard not to default on a loan. You might be surprised to find out that some actions you take to improve your credit score are actually hurting it.

If your credit score isn't where you want it to be, it might be due to one of these habits. Read on for four good ideas that might actually be hurting your credit score:

1.) Debt settlement

Settling your old debt can seem like an easy way to get out of a sticky situation. You make an agreement with a third party, pay a part of your debt and the owner writes off the rest of it. However, unless it's at least 90 days since the debt was due, it's always better for your credit score to pay the debt back in full yourself. Settling a debt for less than you owe can take your credit score down as much as a hundred points. This happens because the debtor only took your settlement on the assumption they'd never see the full amount you owed. Future lenders worry that they'll end up in the same situation, and that makes them hesitant to lend.

2.) Turning down credit

It might seem like a good idea to reject a higher credit limit. If your credit card offers to boost your limit, that might seem to indicate you have more money to spend. If you've struggled with responsible credit management in the past, you might want to turn it down in an effort to keep your spending in check. Keeping your credit limit low can give you a budget and a sense of security regarding when you'll stop yourself from spending.

However, a higher credit limit does come with benefits. To be exact, it can boost your score quite a lot through a something called a credit utilization ratio. That's the ratio of your credit card balance to your credit card limit. The less you spend relative to what your limit is, the higher your score in terms of this one factor. That means, if you have a higher credit limit, you'll be using less of it, and therefore increasing your score.

3.) Avoiding credit cards

With all this rigmarole and paperwork, many people might think it's easier to just not have a credit card at all. While it might make your life simpler at first, it can complicate your relationship with credit in the future. You might not need credit for day-to-day things like buying groceries or gas, but you will need it for a home loan, auto loans and to prove to potential landlords and employers that you can be trusted. So long as you're paying everything on time and not carrying a high balance, a credit card is much more beneficial in the long run.

4.) Closing paid accounts

Paying off a credit card can be a big struggle. Once it's over, your instinct might lead you to throw it away, burn it or otherwise have it completely out of your life once and for all. Credit reporting agencies say something different, though. Since 15% of your credit score is the length of your credit history, you want to keep your cards for as long as possible.

Additionally, your credit utilization score is worth 30% of your total score. Closing a credit card account also kills available credit, which lowers that balance-to-limit ratio. You can destroy the card itself and delete its record from online shopping sites to be certain you'll never accidentally use it, but don't cancel it. Even after all that, you should keep the account open (provided there's no annual fee attached to it), just to keep your score up.

You don't have to go it alone, but you can leave bad credit cards alone by taking a look at First City's Visa Platinum. It has a low rate—lower than most banks, no Balance Transfer fee, and no Annual fee. Check out one of best credit cards today, here!

Tuesday, November 1, 2016

The financial services industry is based on trust. When a company abuses that trust, the whole industry seems off kilter. While the details about the extent of the recent fake account scandal are still coming to light, we know enough to start painting a picture of what was going on inside the bank. Here are a few common questions about the scandal and what to do if you've been impacted by it.

What was going on inside Wells Fargo?

As a commercial bank, Wells Fargo generates revenue from each customer account. It could do this in a variety of ways: fees, low balance penalties or other charges. Whatever the cause, the bank made a little bit of money on each one. In an effort to maximize its revenue, the company established a sales quota for each of its sales teams. Individual salespeople and team managers were therefore under heavy pressure to meet an unrealistic goal and open new accounts.

Somewhere along the line, someone inside the organization decided the only way to meet these goals was through fraud. Eventually, fraud became a widespread corporate practice. It became standard procedure to open fake accounts using an existing customer's information and then charge fees for services they never wanted or agreed to.

Worse yet, the company began actively silencing those who attempted to put a stop to this wrongdoing. Over the course of eight years, about 5,600 employees were fired for reporting this activity to the Wells Fargo ethics hotline or attempting to discuss it with human resources. Many of them were effectively blacklisted, preventing them from working in financial services again.

After this information became public, Wells Fargo CEO John Stumpf was forced to resign. All evidence suggests that he was aware of the situation and did nothing about it. The bank has been fined millions of dollars and is also being asked to issue refunds to many of its victims.

What can I do if I was a victim of fraud?

Most of the people who had fake accounts opened in their names have already been given a refund. While money can't make up for the inconvenience or the sense of betrayal that occurred, those refunds are being issued automatically to most of the people who were affected. Wells Fargo is conducting an internal review to uncover the extent of the damage, and it's extended its search back to 2009.

If you've done business with Wells Fargo, it might be a good idea to get a list of accounts that have been opened in your name during your time as a customer. You can do this by getting a free credit report at annualcreditreport.com.

Those hoping for a day in court will likely be disappointed. Several victims of the scam attempted to form a class action lawsuit against the bank, but the case will likely be thrown out. Wells Fargo account opening agreements specify that any disagreements must be settled through arbitration, and the court has previously held that this applies even to accounts that were opened through fraud.

Why did Wells Fargo do this?

Part of what set up Wells Fargo for failure was the profit motive at the heart of its business model. As a corporate bank, Wells Fargo has a first obligation to its shareholders. Any obligation it might have to its account holders is secondary; it only needs to maintain enough good will to keep customers coming back. That creates an inevitable conflict of interest between the desire to maximize profits with the safety and trust of customers.

Credit unions, on the other hand, are not-for-profit institutions owned by their members. Our shareholders and our account holders are exactly the same people. Our board consists of volunteers from within our community, not individuals seeking a payday. That allows us to always put the interests of our members at the forefront of what we do.

Monday, August 29, 2016

You’ve fetched coffee, made copies and done all the typing and filing for an entire department. Congrats! You’ve finally finished your summer internship! In many ways, just going back to school would be a wonderful relief, but you might be looking for more.

You took this internship as a stepping stone in your career. If you want to take the next step, though, you’ll need to transition it into an actual job. That can be an intimidating process.

Here’s the the good news: You’ve made it through the door. Most companies prefer to hire and promote from within. They don’t want to go through the interview process again any more than you do.

The bad news, though, is that doesn’t make it automatic. If you’re expecting the company to do the work of finding a place for you, you’re going to be disappointed. That said, it’s not impossible. It just takes the right combination of accomplishment, luck and know-how to get the position you’ve been dreaming about.

If you’re struggling with planning how to convert your internship into a full-time position, remember these five pointers!

1.) Ask for a specific position

One of the biggest mistakes job-seekers generally make is asking the broad question “Are you hiring?” The answer may be yes, but it’s unlikely – especially at large firms – that anyone knows about every possible position. For external applicants, doing the legwork to track down potential openings is tricky. That’s one of the advantages of the internship.

Keep an ear to the ground for new projects, new teams or new promotions. Those are places where there are likely to be new positions opening. Your immediate supervisor may not be in a position to make a hiring decision, but they can probably put you in touch with the person who is. A recommendation from someone within the company will go a long way toward putting you in that office.

2.) Time your ask

The last day of your internship is not the right time to have the first conversation about your future with the firm. Timing like that makes you seem like a procrastinator. You’re giving the impression that you put off thinking about your future until the last possible minute. This is not a trait companies want in their employees.

Ideally, you’ll want to ask about a new position after a big win. If you’ve just finished a major project, you’ve got the limelight, but only for a brief window. It doesn’t have to be one of those cinematic, vital to the life of the company projects, but it should be a significant success that shows your skills and determination.

When you reference this accomplishment, always do so with a humble-brag. Ask your immediate supervisor if the task was done to their satisfaction. Getting them in the headspace of singing your praises will make them much more likely to recommend you for another position.

3.) Be everywhere

Part of the benefit of an internship is the chance to see the inner workings of a company. Yes, you’re gaining experience doing a specific set of tasks, but you’re also learning about different aspects of a business in your field. You don’t do that by keeping your head down and doing the work in front of you.

Instead, take every opportunity to visit and work with other departments and people. You never know who you might impress! The more people in the company who know your name, the more likely it is you’ll get to stay.

4.) Become indispensable

Lack of experience is typically seen as a liability by employers, but you can turn it into an asset through your internship work. That you don’t have any experience provides you with tremendous flexibility in how you tackle tasks. Find some piece of technology, new practice or set of procedures you can master. This means taking every training opportunity and looking over the shoulder of as many folks as possible. Your objective is to become an expert at the company in something.

The truth is, it doesn’t matter what. If you’re the only one in the department who knows how to run the copier, that’s a strong argument for keeping you on. Running the copier may not be your dream job, but it can get you in the door.

5.) Be professional

The best attribute you can display in your internship is follow-through. That means showing up on time every day, dressed like you’re there to work, and taking on every task — no matter how menial — with enthusiasm and dedication. Demonstrate to your employer that you’re the kind of person they want to hire.

The summer internship can be a great start to a great career, but — like every opportunity — you get out of it what you put into it. With a lot of work and a little luck, it can be the first in a series of career successes.

Wednesday, July 27, 2016

Plenty. We live in the digital age, where you don't even need to leave your couch to do anything; from buying groceries to meeting the love of your life. First City Credit Union is one of the many financial institutions allowing you to bank from a mobile device and through mobile apps.

In fact, The digital age is ushering in a new era of green banking, and the planet is healthier for it already. Mobile banking saves gas that you would spend on making a special trip to a branch. It saves paper that would be used on statements or receipts. Sites like Paypal or GoFundMe allow you to pay or be paid instantly, which cuts out the need for paper in checks or, again, receipts and paper money. The same goes for the ability to pay bills automatically online, through our online/mobile banking page.

Are there any risks to digital banking?

While the benefits are fantastic, digital banking does come with a few small risks. Some people find keeping a budget to be more difficult when they can just look at their phone and rationalize a purchase they don't need simply because their balance seems okay. This is best solved with separate accounts for savings and spending, so you never think you have more money than you do. Also, although you can do quite a lot of your banking online, you can't do everything. There are still some important tasks that you need to do in person or by mail, such as signing loan documents and making deposits over a certain threshold.

Of course, the biggest concern with banking in the digital age is the ever-looming threat of hackers. Robbery no longer looks like a tall man in a ski mask with a revolver. Instead, most robbery happens through identity theft, perpetrated by a much scarier, faceless criminal who could be anywhere. Protecting security is at the forefront of everyone's minds, and First City Credit Union uses industry-leading security protection technology. You can help by choosing strong passwords and avoiding online banking from public computers. Fortunately, identity theft is still quite rare. About 4% of the U.S. population was victimized by identity theft in 2013 (Sources: World Bank, CNN Money, Javelin Strategy and Research). In fact, online banking has helped reduce much of the danger that comes from having paper with personal information on it sitting in the garbage can for anyone to find. The benefits that online banking provides continue to outweigh the risks.

Are there any banking initiatives that directly support environmental sustainability?

For starters, an ethical financial institution is one whose primary goal is to support sustainability and the long-term health of its community. Credit unions nationally have led the charge by identifying and supporting local businesses. The less distance goods have to travel, the less CO2 gets pumped into the atmosphere. You can help these efforts when you purchase a car or a home. Buying an energy-efficient car or building green features into your home can help build a sustainable future.

How can this help me?

In addition to the long-term benefits of going greener, sustainable banking offers many advantages. Online banking can be done at any time and any place - no waiting for the branch to open, no wasting extra gas money driving to the ATM. Having receipts and monthly statements emailed to you keeps them all in one place, which allows for easy organization and budgeting.

The ability to be paid instantly allows you to, well, be paid instantly. No more waiting for a check to cash or losing it at the bottom of your purse. With automatic bill payments, you can put the bills right out of mind and never have to worry about forgetting them again. This does great things for your stress level and your credit score. Greener auto loans or mortgages allow you to save money on things that might have previously been more expensive, making them worth the hassle. In the end, saving the earth can also save you time, money and energy.

How can I go greener in my banking?

In the year 2016, greener banking is easier than ever. If you're ready to be a part of the future, take these four easy steps:

Monday, July 11, 2016

The recent decision by the United Kingdom to leave the European Union has led to serious turmoil in stock markets around the world. Many investors are panicking and selling off stocks in a hurry. Smart investors, though, can be prepared to ride out the storm by making a few savvy moves.

In times of trouble, people tend to look for the safest possible investment. These generally fall into three groups: stock in big companies, bonds of financially stable governments and real property. That last category should be of interest to homeowners and house hunters alike, as the recent Brexit vote is likely to be a boon to real estate markets everywhere outside the United Kingdom.

It’s not that people are flocking out of the UK and looking for houses to buy. Rather, many people are looking to invest in real estate, but the British pound sterling is experiencing a loss of value. On the other hand, for people looking for real estate either as living space or as an investment, the time has never been better.

Let’s take a look at how this could affect each group individually.

Real Estate Investors

Owning rental property is a big wealth-building strategy component for many people. Whether you serve as landlord yourself or turn the property over to a management company to handle the day-to-day operations, rental income is as close to passive as it gets. You get the rent minus expenses, plus the appreciation of the property.

One of the biggest costs associated with buying rental property is the mortgage. Very few landlords own rental property outright. More often, they mortgage the property and use the rent to cover the mortgage payment.

Interest rates have been historically low as a means of economic stimulus for quite some time, so costs have already been modest. With the uncertainty created by the Brexit vote, most experts expect the Fed to avoid raising those rates. Mortgages will stay cheap into the foreseeable future.

Moreover, investors seeking to invest in a more diverse real estate portfolio are buying mortgages at an accelerated rate. They’re doing so because they’re seeking a safe investment, and prime mortgages (loans made to people with good to very good credit) represent a pretty safe place to park money. Since there are more dollars available to lend, the cost of those dollars (the interest rate) will drop further.

If you’ve been on the fence about buying an investment property, the time could be right. Low rates and rising property values could make it a valuable part of your retirement strategy.

Homebuyers

Most of the reasons why home ownership makes sense for investors also make sense for people looking to buy a home for themselves. There’s one more factor, though, that could tip the scales in favor of buying a home.

One of the other effects of increased mortgage availability is an easing of mortgage requirements. The door is open for borrowers with less-than-optimal credit scores. Many of these people have been scared away from the mortgage market because they fear they won’t be approved. The increased availability of credit, though, may make mortgages easier to get. Working through a community lender like First City can offer borrowers the personal guidance they seek along with access to loan options that are not always widely available on the open market.

Homebuyers with good or very good credit may be able to up their price range a bit. If you’ve been on the market for a while and had little success, it may be time to take another look at payment projections and re-evaluate how much house you can afford. With interest rates approaching 3-year lows, you may be able to find an affordable house payment on a more expensive house.

Homeowners

If you’re a current homeowner, these rates should be attractive to you, as well. If you’re thinking about selling your home, now’s a great time. Cheap loans and rising rents will continue to push more people into the housing market, and more demand means prices are sure to continue to increase. Now might be a good time to get an estimate or test the waters to see how much you might get for your home.

If you’re happy with your home but want to make some upgrades, getting a home equity line of credit to do those remodels is another way to take advantage of low rates. Remodeling a bathroom or kitchen using a home equity loan could help you take advantage of the surging real estate market, and it could make your house a happier home in the meanwhile.

If remodels aren’t in the cards right now, it may be a wise opportunity to refinance. If you got a loan when you had less than perfect credit but have been making payments consistently, you could qualify for a significant savings in your monthly payments. The same is true if your mortgage is more than 10 years old. Refinancing now could lock in some serious savings and take some pressure off the budget each month.

Don’t buy into the hype. The Brexit vote is not a time for panic. It’s not a time to stuff your money in a mattress. It’s a time to make smart moves to protect your investments, when disciplined investors can significantly improve their position. You can do it, and First City can help!

Friday, July 8, 2016

Listening to financial pundits, it's easy to think that the end of the world occurred last month. The
United Kingdom voted to leave the European Union in a contentious referendum. While the implications of this decision are many and wide-ranging, there's no need to panic.

What the Brexit does

The referendum in the United Kingdom was to leave the European Common Market. The Market is a
network of countries (called the Eurozone) that don't charge each other import or export taxes and
simplify the process for citizens of any Eurozone member to get permission to work in any other
country. The Brexit vote means that the United Kingdom is leaving that network.

For citizens of the United Kingdom, this decision could have very serious implications. On one hand, the country will get more control over its immigration policy. It is no longer obligated to follow European Union rules on migration or refugee handling. The desire to secure their borders was, in large part, the motivator for those who voted in favor of leaving the European Union.

What most financial experts are concerned about, though, are the trade implications. The United
Kingdom will have to negotiate its own trade policies with every other member of the Eurozone. Over the short term, this will be incredibly complicated. For the past 20 years, British trade policy with the rest of Europe has been determined by the Common Market rules. It will take time to reestablish trade policies with the many nations of the Union.

No need to panic

The one thing that drives markets down more than anything else is uncertainty. If no one has reason to believe that trade will occur and profits will be made, there's no motivation to invest. That's the current circumstance. There are no clear trade rules governing Britain's participation in the Common Market, which is driving investors in both European and British markets away. This same fear is also impacting other markets of countries that do business with the United Kingdom. This behavior is driving concerns about a short-term recession.

Ultimately, trade agreements will be mended. The United Kingdom and the rest of Europe are too close, both politically and economically, to remain at odds for long. Business as usual will return sooner rather than later, and short-term losses will rebound.

This is small consolation to those who will lose their jobs due to the economic slowdown, though the
most pronounced effects of this loss will be in the United Kingdom. U.S. companies that conduct a great deal of business with Europe and the United Kingdom may have some staff reductions, but job loss should be minimal in the U.S., at least over the long term.

Normalcy will return

Many doom and gloom economists and pundits predicting mass economic ruin rely on a number of
things happening, each of which is unlikely. First, investors must abandon the Pound Sterling, the British currency, en masse. This is unlikely. The British government's ability to pay its bills is still sound, and the currency holds enough value to resist the impulses of speculation.

Second, those who predict financial catastrophe assume a trade war will spark between the United
Kingdom and the rest of Europe. Such analysis ignores the likely galvanizing effect that the Brexit vote will have on British moderate voters. As Prime Minister David Cameron has recently resigned, and with opposition leader Jeremy Corbyn likely to do the same, new elections will install a new British government shortly after the British leave the European Union. Those who were opposed to the Brexit referendum, but stayed home because they considered it impossible that the referendum would pass, will heavily influence this new government. These voters will elect moderate leaders capable of returning a degree of normalcy to trade relations, and thus preventing a trade war.

What this means for your portfolio

Over the short term, stocks and foreign currency funds will likely take a significant beating. Resisting the urge to cut and run from these positions will take discipline, but it will reward investors with the courage to ride out the storm. When normalcy returns to international trade, these positions will rebound. This sudden downswing may mean postponing retirement for a few years in order to take advantage of bargain-priced securities in the interim, but investors who sell now may end up regretting the decision. For those still saving for retirement, it may be prudent to find another place to stash gain-seeking money in the interim. Instead of investing in the typical instruments, consider long-term share accounts. As governments in Europe cut interest rates in an effort to stimulate their economies, traditional safe instruments - such as government bonds - will lose some of their luster. Long-term share accounts will keep current interest rates through the economic trouble and provide a better 3- to 5-year return than many other traditionally safe investments.

The bottom line

The Brexit vote will likely cause some damage to the global economy, but the damage will probably be minimal. After an interruption of trade, everyone will get back to business as usual across Europe. Some companies may cut their staff down for a short time, but they will re-expand once the economic
situation returns to normal. Keep calm, and keep saving.

Your Turn:

What do you think of the Brexit vote? Was Great Britain right to want to control their borders at the
expense of their economy, or did they act rashly by breaking ties with their biggest trading partners?
Let us know!

Friday, June 10, 2016

Summer is a wonderful time to enjoy the great outdoors. Whether you’re
involved in recreation league sports, hiking, or barbecues, there’s
something for everyone. Usually, flying pests are just a nuisance. The
worst they do is provide a minor irritation to an otherwise fine outing.

This year looks to be different, though. The Zika virus, a
blood-borne illness transmitted by mosquitoes, has been identified
throughout the United States. Florida, Texas and Kansas have already
confirmed cases and more states are likely to follow.

The symptoms of Zika are not terribly severe. Infected people may
experience body aches, fever, rash and eye redness. That’s, of course,
if they experience any symptoms at all. Odds of death from Zika are
remote and hospitalization is rare. People with compromised immune
systems may be at greater risk, but the greatest threat posed by Zika is
the risk of birth defects.

A woman who is pregnant may transmit the disease in utero to the
fetus. This infection dramatically increases the risks of a birth
condition known as microcephaly – an underdeveloped brain. Babies born
with microcephaly will face risks of seizures, developmental delays and
the loss of sensory function.

There’s no treatment, vaccine or cure for Zika virus. The only step
you can take to reduce the risk of transmission is to reduce the
primary risk: mosquitoes. Some municipalities have begun sterilization
and spraying efforts to control these pests, but individuals can also
take steps to reduce their exposure to Zika.

The panic surrounding Zika has also led to an upswing in aggressive
sales tactics for mosquito eradication products. Unscrupulous
salespeople will exploit public fear about the disease and promise to
sell products that will eliminate mosquitoes. If such a product existed,
it would be used around the world by people everywhere. If you’re
worried about mosquitoes and your family, it’s best to be pro-active
and eliminate mosquitoes on your own terms, rather than find yourself
duped into the latest scam fad.

Before diving to the home improvement store and filling your cart
with mosquito repellents, remember that not all solutions are created
equal. Let’s run down the most popular products and consider the pros
and cons of each, so that you can make an informed decision on how to
keep your family safe...

1) Traps

Mosquitoes find humans through three different means: heat, scent
and breath. Mosquito traps draw mosquitoes in, then seal them in a
collection container and kill them. These devices usually run between
$50 and $400, with more expensive versions having more complex
mechanisms to attract mosquitoes and more efficient means of killing
them.

The best part about mosquito traps is that they’re entirely
passive. Attach them to a power supply and let them work. They’ll
require some cleaning and maintenance to ensure their effectiveness, but
they’re the least labor-intensive of options we’ll discuss. The biggest
traps claim to be effective over about an acre of land, although
independent reports have yet to verify this claim.

The biggest downside of mosquito traps is that they’re an
incomplete solution. Mosquito traps only kill adult mosquitoes. They do
nothing about eggs or larvae. Since these systems will never be 100%
effective, traps alone are not enough to combat Zika.

2) Extermination

There are a variety of steps homeowners can take to stop mosquitoes
from spawning in the first place. Some of these are fairly obvious,
like draining areas of standing water and filling them to prevent the
puddles from forming again. Doing so prevents mosquitoes from breeding
nearby and can help eliminate the threat. For more intensive measures,
some people use chemical insecticides, either in a scheduled misting
system or as a one-time treatment.

The use of chemical insecticides seems, at first glance, like an
easy solution. Many chemical sprays not only kill adult mosquitoes but
also prevent mosquitoes from spawning in those locations again. Using a
controlled quantity of chemical can prevent any health risks.

However, chemical sprays are powerful environmental influencers. If
applied insufficiently, they can produce resistance and immunity among
the pests. If applied in too great a quantity, they can cause damage to
plants, pets and people. Their use is best left to professional
exterminators, which raises the cost.

3) Repellent

This is by far the easiest solution, although many people find the
process annoying. Keeping a bottle of spray-on insect repellent by the
door and spraying yourself down before every outside session may seem
irritating, but it’s one of the most effective steps you can take. More
traditional remedies, like citronella, may provide some repellent, but
are no more effective than any other smoking candle.

When choosing a repellent, the chemical attribute which ties most
highly to success is DEET concentration. For serious, long-term outdoor
activities, concentrations of 30% provide maximum protection for the
longest duration. For family barbecues or fireworks shows,
concentrations of around 10% provide a smaller range of coverage for
about two hours. Because of the risk of accidental consumption, 10%
concentration of DEET is the highest level that is recommended for
children.

For those concerned about spraying chemicals, the FDA has approved a
clothing treatment insect repellent. Look for products containing
permethrin, or the brand name Insect Shield. Both the CDC and the EPA
endorse these products for use in insect control.

When it comes to the safety of your family, make sure you separate
truth from fiction. If anyone claims they can make mosquitoes disappear
overnight, run the other way. The best approach involves a combination
of efforts to make sure you get all the protection you need.